Confidence on OLED
LG Display will make an additional investment of plastic organic light emitting diodes (OLEDs) in its business site in Gyeonggi Province. This accounts for 15.7% of LG Display’s owner’s equity.
LG Display announced on July 27 that it decided to invest 1.99 trillion won (US$1.73 billion) in building a sixth-generation POLED panel production line in its Paju plant with a monthly production capacity of 15,000 units in a regular BOD meeting on July 26. POLEDs are evaluated as a core material for flexible displays such as bendable, rollable and foldable displays. At the moment, Samsung Display is enjoying 97% o the POLED market.
HIS, a market survey organization, is forecasting that the flexible OLED market will increase more than seven-fold to 416 million units in 2020 from 59 million units this year. POLEDs used mainly in Samsung Electronics’ mobile products are said to be used in the next iPhone next year, pushing up panel manufacturers’ expansion of investment. This is why latecomer LG Display has been making aggressive investment in POLEDs since last year.
LG Display will use 50% of its 2016 facility investment budget of about 4.5 trillion won (US$3.91 billion) for OLED investment with a focus on POLEDs. Last year, LG Display decoded to invest in sixth-generation POLED production line (E5) in its plant in Gumi, North Gyeongsang Province.
With equipment taken in recently, E5 investment of one trillion won is in smooth progress as planned for mass production in 2017. E5’s production volume is about three million units.
Additional E6 investment of about 2 trillion won (US$1.73 billion) made the volume of POLED investment which has been finalized so far exceed 3 trillion won. If POLED production begins on a full scale in 2018 following those in Gumi, LG Display is expected to lay the foundation for the expansion of the POLED smartphone business.
In addition to this investment, LG Display is producing mobile products such as smart watches through 4.5th-generation POLED production line (E2) with a monthly production capacity of 14,000 units. Accordingly, when E6 runs in 2018, LG Display’s total POLED production volume will reach 7 million to 8 million units a month with E6, E2 and E5 put together. Yearly, the three lines can roll out 80 to 90 million units.
Moreover, the company increased its OLED competitiveness by investing over 10 trillion won (US$8.69 billion) in P10 Plant in Paju as well. P10 Plant is now under construction and will begin to operate in 2018. P10 Plant will consist of a big-sized OLED line for TVs and a POLED line.
Including the P10 line, the volume of LG Display’s POLEDs will reach 100 million after 2018.
On the other hand, LG Display announced on the day that the company posted 5.85 billion won (US$5.09 million) in sales and 44.3 billion won (US$38.5 million) in operating profit, respectively. A drop in prices of LCD panels ignites a year on year drop of 90.9% in operating profit but fortunately, the company did not fall into the red.